System and method for dividing a remittance and distributing a portion of the funds to multiple investment products

ABSTRACT

A known charge card billing system communicates with an investment broker system, wherein the investment broker system includes an instruction arrangement database, payment hierarchy and an investment account. An interested cardholder suitably appoints the charge card administrator as a processing agent to collect and promptly remit the cardholder&#39;s voluntary, periodic payments for investment into preselected investment products, such as, for example, mutual fund shares, fixed annuities, variable annuities, CDs, insurance, certificates, equities and/or the like. The billing system distributes a billing statement at the end of each month, wherein the statement includes all of the charges for that month and a reminder to remit an additional dollar amount for the preselected investments. The cardholder then sends a single payment for the charges and the investments to the charge card administrator. After receiving the payment, the system appropriately unbundles the payment and distributes the remitted payment to the card account to satisfy the captured financial events and to the investment broker system for the purchase of investment products.

REFERENCE TO RELATED DOCUMENTS

A portion of the disclosure of this patent document contains material towhich a claim for copyright is made. The copyright owner has noobjection to the facsimile reproduction by anyone of the patent documentor patent disclosure, as it appears in the Patent and Trademark Officepatent file or records, but reserves all other copyrights whatsoever.

TECHNICAL FIELD

The present invention relates generally to a system and method forapplying funds to investment products, and more particularly, to asystem and method for using a transaction card billing system to allowcardholders to make predetermined investment contributions to multipleinvestment products on a regular basis.

BACKGROUND ART AND TECHNICAL PROBLEMS

An increasing number of people are investing their money in a variety ofinvestment products. For many of these people, a prudent investmentstrategy is to fund investment products, such as annuities, mutualfunds, brokerage accounts, CDs, insurance, certificates, equities andthe like, on a regular basis. However, even if people send a check tofund an investment product, the remittance process is typically timeconsuming and people often lack the discipline required to fundinvestment accounts on a regular basis. Moreover, people alreadytypically write numerous checks each month to pay for transaction cards,utilities, investment products and other recurring expenses.

Due to the inefficiencies associated with numerous required remittances,people desire to avoid the hassles of multiple payments each month tovarious entities. Accordingly, a system which combines payments owed toselected entities and which relieves the consumer of the burden ofhaving to proactively deposit separate investment funds each month isneeded. Thus, a system which conveniently combines transaction cardpayments with investment product payments would help to solve some ofthe existing remittance problems and satisfy unmet consumer needs. Thecombined system would also provide substantial benefits to theinvestment product brokers by increasing the percentage of cardholderswho purchase investment products. Furthermore, the combination oftransaction card payments and investment product payments would benefitthe broker by allowing the broker to analyze the cardholder investmentdecision-making process and suggest other investment options to thecardholder.

With respect to transaction cards, an increasing number of people usetransaction cards each month, such as credit cards, charge cards, debitcards and the like, wherein the cards are primarily designed as a methodof payment, a bill paying mechanism, or a means of financing thepurchases of goods and services. Therefore, with respect toimplementation of a combined system, most transaction card companieshave already developed efficient billing and remittance systems, sosupplementing the existing billing systems with investment productbilling and allocation functionality would most likely be a relativelymodest software and hardware investment.

SUMMARY

Prior to beginning the investing account arrangement with a transactioncard company, the cardholders notify an investment broker system oftheir investment product selection, the total amount they intend toinvest on a monthly basis, and the specific investment amount for eachinvestment product. The investment broker system populates an investmentinstruction arrangement database with the cardholder information, namelythe selected investment products and investment amounts. The charge cardadministrator, using an administrative system, then incorporates thecardholders' intended investment amounts onto its respective charge cardbilling statements as a reminder to remit the investment amount alongwith the regular charge card payment. After receiving the statement, thecardholder sends a single check for both regular charge card purchasesand for the investment purchases.

When the cardholder payment is received by the charge cardadministrator, the payment processing system determines, based on thecardholder's preselected investments, how each of the cardholders'payments should be allocated between regular charge card payments andinvestment amounts, namely through the use of a payment hierarchy whichincludes a predetermined set of allocation rules. The charge cardadministrator's payment processing system then electronically forwardsthe appropriate investment amount request to the broker to execute theinvestments based upon another payment hierarchy related to theallocation of the investment funds among the investment products. Afterexecuting the investment, the broker system notifies the cardholder ofthe price at which the investments were purchased by the system.

BRIEF DESCRIPTION OF THE DRAWING FIGURES

The subject invention will hereinafter be described in conjunction withthe appended drawing figures, wherein like numerals denote likeelements, and:

FIG. 1 is an exemplary block diagram showing a prior art cardpurchase/payment process including billing remittance and settlement;

FIG. 2 is an exemplary logical data model of the data relationships andrules in accordance with one embodiment of the present invention;

FIG. 3A is an exemplary high-level process flow diagram showing ageneral method in accordance with one embodiment of the presentinvention;

FIG. 3B is an exemplary process diagram showing a more detailed methodin accordance with one embodiment of the present invention;

FIG. 4 is an exemplary flow diagram showing a more detailed method ofthe cardholder billing process for mutual funds in accordance with oneembodiment of the present invention;

FIG. 5 is an exemplary flow diagram showing a more detailed method ofthe cardholder remittance process for mutual funds in accordance withone embodiment of the present invention;

FIG. 6 is an exemplary flow diagram showing a more detailed method ofthe create order and execute order process for mutual funds inaccordance with one embodiment of the present invention;

FIG. 7A shows an exemplary billing statement summary page in accordancewith one embodiment of the present invention; and,

FIG. 7B shows an exemplary billing statement detail page in accordancewith one embodiment of the present invention.

DETAILED DESCRIPTION OF PREFERRED EXEMPLARY EMBODIMENTS

As background, FIG. 1 shows an exemplary flow diagram of a typical priorart transaction card payment processing system including the billing,remittance and settlement processes. To start the billing process, aclient purchases an item at a merchant by charging the item on a chargecard (step 1). The merchant suitably reports the charge to the financialcapture system of the charge card administrator (step 2), then themerchant payable system within the charge card system processes thepending payables and reports the payables to the charge card financedepartment so that the finance department knows the amount of funds toprovide back to the merchant (step 3). The finance department then wirespayment to the merchant and records the payment (financial event) in thefinancial capture system (step 4).

The charge card system also extracts the billing, remittance andadjustment information from the financial capture system, so that theaccounts receivable billing system is able to group the new purchaseswith prior remittances and adjustments which occurred since the priorbilling period (step 5). If appropriate, a hold and review code isassigned to a particular account number (step 6). The billing recordsare then scanned by the collection system, and if appropriate,adjustments are made to the billing records such as, for example,initiating a collection process for overdue amounts, canceling financecharges for overdue amounts, reversal of outstanding bills if the billsare over two months old, preparing a letter to the client explaining thereversal of the account, preparing a 60-day report letter to the clientand/or the like (step 7). After completing the account analysis, thestatement system populates the billing statements (step 8) andappropriately addresses the billing statements (step 9), then thebilling statements are suitably transmitted to the clients (step 10).

After receiving the billing statement, the cardholder remits a check,electronic payment or other negotiable instrument to a payment center ofthe charge card administrator to cover the previously incurred charges(step 11). Upon receiving the remittance payment from the cardholder,the remittance processing system transmits a remittance receivables fileto the financial capture system to settle the account (step 12).

In accordance with a preferred embodiment, the present system includes acharge card billing system 10 that communicates with an investmentbroker system 20 as illustrated in FIG. 2 and as explained more fullybelow. One skilled in the art will appreciate that, as used herein, a“cardholder” includes any person or entity which uses a transaction cardand participates in the present system. Similarly, a “transaction card”or “card” includes any device or code suitably configured to allow thecardholder to interact or communicate with the system, such as, forexample, a charge card, credit card, debit card, prepaid card, telephonecard, smart card, magnetic stripe card, bar code card,authorization/access code, PIN number, Internet code and/or the like.Thus, the cardholder may include a person who is simply in possession ofan authorization or account code. Moreover, communication between thecardholder and the system preferably exists by any suitablecommunication means, such as, for example, a telephone network,Intranet, Internet, point of interaction device (point of sale device,personal digital assistant, cellular phone, kiosk, etc.), on-linecommunications, off-line communications and/or the like. One skilled inthe art will also appreciate that, for security reasons, any databases,systems or components of the present invention may consist of anycombination of databases or components at a single location or atmultiple locations wherein each database or system includes varioussecurity features such as firewalls, access codes, encryption,compression and/or the like.

The general steps in the operation of a preferred system are illustratedby the flowchart of FIG. 3A. An investment broker system 20 markets thebenefits of the system to cardholders (step 200). An interestedcardholder enrolls in the system and suitably appoints the charge cardadministrator as a processing agent to collect and promptly remit to theinvestment broker system 20 the cardholder's voluntary, periodicpayments of cardholder funds (wherein the cardholder funds do notinclude a required repayment of a loan from the charge cardadministrator) for investment into preselected mutual fund shares, fixedannuities, variable annuities, CDs, insurance, certificates, equitiesand/or the like (step 205). Billing system 10 (FIG. 2) preferablydistributes a billing statement at the end of each month, wherein thestatement includes all of the charges for that month and a reminder toremit an additional dollar amount for the preselected investments (step210). The cardholder then sends a single payment for the charges and theinvestments to the charge card administrator (step 215). After receivingthe payment, the billing system 10 appropriately unbundles the paymentand distributes the remitted payment to card account 12 to satisfy thecharges and/or to the investment broker system 20 to purchase investmentproducts (step 220).

More particularly, with reference to FIG. 2, the system preferablyincludes a marketing system 48 having a cardholder database 5, a billingsystem 10 and an investment broker system 20. Marketing system 48 is anydatabase, software, hardware, system and/or the like suitably configuredto communicate with cardholder database 5, billing system 10 and/orinvestment broker system 20. Marketing system 48 is also configured toanalyze cardholder statistics and investment product statistics, whilecompiling a list of cardholders which meet predetermined criteria forsolicitation. The predetermined cardholder criteria includes, forexample, card type, account numbers, client card address, year of birthand solicitation codes. Marketing system 48 also preferably tracksexisting cardholders' activity, investing preferences and investingpatterns to further refine the client and investment product selectionprocess. With respect to the investment products, marketing system 48analyzes statistics for various investment products to determine theoptimal investment products to offer to selected cardholders. In apreferred embodiment, marketing system 48 suitably creates anacquisition tape of preferred cardholders and investment products andtransmits the acquisition tape to investment broker system 20. Marketingsystem 48 is preferably the American Express MID System.

Cardholder database 5 is any database, software, hardware, system and/orthe like suitably configured to communicate with marketing system 48,billing system 10 or investment broker system 20 and to accept, storeand transmit cardholder information. Cardholder database 5 preferablyincludes any information related to the cardholder including, forexample, name, address, demographic information, social security number,date of birth, spending habit information, billing history information,credit history information and/or the like. In a preferred embodiment,cardholder database 5 is the American Express CIM/Legacy System.

Billing system 10 is any system, software, hardware, database and/or thelike which is suitably configured to organize and print billinginformation and/or monitor, store, audit or obtain remittanceinformation. Billing system 10 can be an existing billing system suchas, for example, the American Express Legacy Accounts Receivable System,or can be a specially configured billing system to provide the functionsof the present invention. In a preferred embodiment, billing system 10includes card account database 12, financial events database 14, billinginformation database 16 and remittance information database 18. One ofordinary skill in the art will appreciate that, although billing system10 is described as the interconnection of numerous databases, billingsystem 10 can be a single system or database or any combination thereof.

Card account database 12 includes any database, system, software,hardware, and/or the like suitably configured to store card account andrelated information. Card account database 12 may include an individualaccount for an individual cardholder or card account database 12 mayinclude a plurality of card accounts for each cardholder 5 if thecardholder uses multiple cards. One skilled in the art will appreciatethat card account database 12 can be an individual transaction carddatabase, multiple transaction card databases, or a single databaseincluding transaction card information from multiple transaction cardadministrators. As such, card account database preferably includesappropriate security to limit access to particular transaction cardinformation by other transaction card administrators. For example, cardaccount database 12 may include all American Express charge card accountinformation. Alternatively, card account database 12 may include VISAcredit card account information, American Express charge card accountinformation, MasterCard credit card information, etc.

Financial events database 14 is any database, hardware, software and/orthe like which is suitably configured to communicate with card accountdatabase 12 and merchant databases in order to monitor and captureinformation from merchant transactions involving the charge card. In apreferred embodiment, financial events database 14 is an existingmerchant charge card system, such as, for example, the American ExpressFINCAP system, which is suitably reconfigured to communicate with thepresent invention. One skilled in the art will appreciate that thepresent invention can alternatively include a financial events databasewhich is specially configured to interact with the present invention.

Billing information database 16 is any database, software, hardwareand/or the like which is suitably configured to monitor billinginformation and transmit billing information throughout the system andto cardholders. Billing information database 16 preferably communicateswith remittance information database 18, card account database 12 andinvestment broker system 20. In a preferred embodiment, billinginformation database 16 includes information about each charge on aparticular card by a particular cardholder. Billing information database16 also preferably creates billing statements (see FIG. 7) wherein theinformation on the billing statement includes charge card information(from financial event database 14) and investment account information(from investment instruction arrangement database 22).

Remittance information database 18 is any database, software, hardwareand/or the like which is suitably configured to monitor receivables andstore information about monies received from cardholders in response toa billing statement. Remittance information database 18 preferablycommunicates with billing information database 16, investment system 20and payment hierarchy system 19. Payment hierarchy system 19 is anysystem, software, hardware, database and/or the like suitably configuredto divide and prioritize remitted cardholder payments based uponpre-established business rules for the sequence of distribution of thereceived funds. In other words, payment hierarchy system 19 allocatesremitted cardholder funds among current and past due card charges inorder to prevent the cardholder from defaulting on the cardholder'saccount.

With continued reference to FIG. 2, investment broker system 20 is anysystem, software, hardware, database and/or the like suitably configuredto communicate with billing system 10, store information related tomultiple investment products and apply remitted funds to multipleinvestment products based upon cardholder instructions. In a preferredembodiment, investment system 20 partially includes the American ExpressCAMS/CATS System for multiple variable fund and fixed fund products orthe Vantage System for the limited annuity products. In a preferredembodiment, investment broker system 20 includes investment instructionarrangement database 22, payment hierarchy system 24, investment accountdatabase 40 which includes variable annuity database 42, fixed annuitydatabase 44 and mutual fund database 46, trade information database 30,marketing information database 32 and product information database 34.

Investment instruction arrangement database 22 is any database,software, hardware, system and/or the like suitably configured toprovide a set of instructions for the distribution of investment fundsto the appropriate investment products and for providing remittanceinformation for a particular investment to be included on a billingstatement of a particular transaction. In a preferred embodiment,investment instruction arrangement database 22 includes, for eachinvestment, the period in which the investment amount appears on thebilling statement, the amount to be distributed, whether thedistribution is a percentage of the whole investment amount or is apredetermined amount and/or the like. Investment instruction arrangementdatabase 22 preferably communicates with investment payment hierarchysystem 24, investment account database 40 and billing system 10.Investment payment hierarchy 24 is any system, database, software,hardware and/or the like suitably configured to determine the allocationof investment funds among pre-selected investment products. In apreferred embodiment, investment payment hierarchy system 24 includes aset of instructions which determines the ordering in which theinvestment products are populated with investment monies and, ifsufficient funds do not exist, investment payment hierarchy 24determines the amount of funding, if any, for each of the investmentproducts.

Investment account database 40 is any system, database, software,hardware and/or the like suitably configured to communicate withinvestment instruction arrangement database 22. Investment accountdatabase 40 is also any database suitably configured to store investmentproducts. “Investment products” include, for example, variable annuityproducts 42, fixed annuity products 44 and mutual funds products 46, butone skilled in the art will appreciate that any investment product maybe available such as CDs, insurance, certificates, equities, savingsaccounts and the like.

Information databases 30, 32 and 34 are optional features which suitablycommunicate with investment instruction arrangement database 22.

Trade information database 30 preferably includes information related toa particular trade or add-on to a cardholder's account, such as, forexample, the number of shares and share price. Trade informationdatabase 30 suitably informs investment instruction arrangement database22 of a remittance into remittance database 18. Marketing informationdatabase 32 preferably includes information about a marketing campaignor effort. Product information database 34 preferably includesinformation regarding an investment product which is offered by theinvestment broker system 20.

One skilled in the art will appreciate that investment account 40 andinformation databases 30, 32 and 34 are exemplary and any number of suchdatabases may or may not communicate with the present system and provideinformation at any process step or to any database. Moreover, thirdparty information databases, brokers, investment products and/or thelike may also communicate with the present system in order to providethe cardholder with increased information and investment opportunities.Furthermore, the cardholder can access any of the aforementioneddatabases through a telephone system, touchtone response system, voiceresponse system, Internet system or any other means for accessing data.

Additionally, the aforementioned systems and databases are preferredembodiments; however, one skilled in the art will appreciate thatnumerous other databases and systems may suitably communicate with thepresent system in order to provide enhanced functionality andinformation resources for the charge card administrator and thecardholder. For example, the system may include additional functionalityfor establishing cardholder accounts, enrolling cardholders, billingcardholders, crediting cardholders for unpaid billings, establishingcollection procedures, bypassing incompatible charge cardfunctionalities (e.g., submitting unpaid amounts to collections,bypassing the authorization process, etc.), functionality for recoveringfrom errors in transmissions or late transmissions, transferring moniesto bank accounts, correcting misapplied payments and transmitting thefunds back to the cardholder, processing withdrawals from the investmentaccounts, providing actuarial data to support reserve accounts,functionality to update name changes, address changes, card numberchanges and card status, reporting functionality, and the abilities toevaluate cardholder activity. The reporting capabilities include cardreconciliation transmission reports, finance reports to track the numberof client and the number of transactions, unprocessed transactionreports, credit adjustment reports, non-financial transaction reports,partial payment reports, paid more than billed reports, paid as billedreports, change request reports, file maintenance error reports andunapplied funds reports.

The operation of the system in accordance with a preferred embodiment isillustrated by the flow diagram of FIG. 3B, along with continuedreference to FIG. 2. After defining and selecting particular cardholdersand investment products which meet predetermined criteria, marketingsystem 48 suitably creates an acquisition tape (step 300) and suitablytransmits the acquisition tape to investment broker system 20.Investment broker system 20 preferably loads the respective informationfrom the acquisition tape into marketing information database 32 andproduct information database 34, along with updating cardholder database5 (step 302). The system then preferably transmits an acquisition(sign-up) offer to the pre-selected cardholders (step 304), via regularmail, Internet, point of interaction device or other electronic means.If the cardholders are interested in participating in the system, thecardholders preferably respond to the offer by submitting, via regularmail, Internet, point of interaction device or other electronic means,investment instruction arrangements to the system (step 306), whereinthe system stores the investment instruction arrangements for eachcardholder in investment instruction arrangement database 22 while alsoestablishing an investment account for each interested cardholder ininvestment account database 40 (step 308). Alternatively, any person canapproach the billing system administrator or investment broker system20, become a cardmember and participate in the present investment brokersystem.

The system then creates a list of cardholder participants who are withinthe same billing cycle (step 310) and the investment broker system 20transmits the list of cardholders along with their individual investmentinstruction arrangements to billing information database 16 preferablyat least seven days prior to the end of the particular billing cycle(step 312). In a preferred embodiment, the list of cardholders createdby investment broker system 20 includes a file of billing statementsbased on the cardholder's billing cycle, wherein the number in the tenthfield of the cardholder's account number preferably determines the typeof billing cycle (e.g., an “8” in the tenth field of the cardholderaccount number instructs billing system 10 about which of the monthlybilling cycles to use). The list of cardholders also preferablyincludes, for each cardholder, card account number, policy number, billamount, the month the contribution represents, service establishmentnumber, product name, an 800 number (for the cardholder to obtain moreinformation about the investment product) and investment product serviceteam location (informs the cardholder where the particular customerservice representatives are located). With respect to a serviceestablishment number, each investment broker system 20 is preferablyconsidered a different “service establishment” (or company/merchant)within the system in order to simplify the incorporation and recognitionof the investment system into billing system 10. Alternatively, theinvestment broker system 20 may be listed separately on billingstatements without reference to a service establishment number.

Billing information database 16 next suitably prepares and transmits abilling statement to the cardholder, wherein the billing statementincludes the aforementioned information received from investment brokersystem 20. At the same time the billing information is sent to billinginformation database 16, an extract file is transmitted to remittancedatabase 18. More particularly, with reference to FIG. 4, investmentsystem 20 suitably creates a list of investment product cardholderswhich all share a similar statement cycle (step 402). Investment system20 then preferably assigns a particular investment product(s) within anarrangement database (an arrangement database includes multipleinvestment product offerings) with an active status for each statementcycle. For each cardholder on the list, the system stores additionalinformation such as, for example, card number, date, billing amount,vendor name (such as American Express Financial Advisors Inc.),city/state, contribution period, product name and account identificationnumber.

The system then creates a card billing file for each statement cycle,wherein the billing file consolidates all cardholders and adds atelephone number, reference number and ROC (record of charge) number foreach record at the time of consolidation (step 404). After creating thecard billing file, in an alternative embodiment, the system suitablygenerates a premium billing transmittal register which is preferably asummary by CAP (central affiliated property) number (overall companynumber, e.g. Walmart) and service establishment number (specific store,e.g. Walmart on 6th Street in Phoenix, Ariz.) of the number of recordsand amounts included on each billing cycle (step 406). The premiumbilling transmittal register is then suitably transmitted to billingsystem 10 (step 408). In a preferred embodiment, after creating the cardbilling file (step 404), a cardholder statement is suitably created atbilling information database 16 (step 414) and the cardholder statementis subsequently mailed to the cardholder (step 416). At the same time asthe billing information is transmitted, the investment broker system 20creates an investment product extract file which includes card numbersfor all investment broker system 20 card authorization arrangementshaving both active and inactive arrangements (step 410). The investmentproduct extract file is then suitably transmitted to billing system 10which runs a billing consolidator process (step 412) and then createsthe cardholder statements (step 414) which are subsequently mailed tothe cardholders (step 416).

In a preferred embodiment, as illustrated in FIGS. 3B, 7A and 7B, andwith continued reference to FIG. 2, the investment product amount owedis incorporated into a known charge card billing statement. Thus, thecardholder receives a consolidated billing statement which includescharge card expenditures 705 along with a desired investment productamount 710 (FIG. 7A shows an exemplary billing statement summary pageand FIG. 307B shows an exemplary billing statement detail page). Afterthe cardholder is suitably billed by billing system 10 (step 314), thesystem stores the billing information within a savings balance database(step 332). The savings balance database is any database suitablyconfigured to store the pending investment contribution balance of eachcard, wherein the balance includes the billed, received and outstandingamounts. After receiving the billing statement, the cardholder submitspayment to the charge card administrator by drafting and submitting anysuitable negotiable instrument to the charge card administrator. Thecardholder may receive the billing statement through regular mail,Internet or other electronic means and the cardholder may remit paymentvia similar means. Upon remittance of the payment to the charge cardadministrator, the remittance information is suitably inputted andstored in remittance information database 18 (step 316).

The received payment is suitably unbundled by processing the paymentthrough payment hierarchy 19 (step 320) to determine the appropriatedollar amount per client to be applied to the appropriate financialevents (step 318) and investment products. The financial eventallocation is determined by an analysis of the financial captureinformation, wherein the financial capture information represents themerchant charges incurred by the cardholder. The financial eventdatabase 14 captures information from any system suitably configured toretrieve, sort and store financial event information, such as,preferably the American Express FINCAP system. Payment hierarchy 19suitably determines any outstanding amounts due (step 330) and creates asettlement file of all cardholders (step 324) which includes theappropriate allocation of the cardholders' remitted funds. In otherwords, billing system 10 reviews the remitted amount from eachcardholder (step 322), then consolidates, preferably each day, allremitted amounts into a single settlement file which is transmitted toinvestment broker system 20. As discussed above, prior to beginning theinvestment arrangement with the charge card administrator, thecardholders provide investment instruction arrangements for the specificinvestment products and the amount they intend to invest on a monthlybasis to investment instruction arrangement database 22. Based upon thepreviously submitted instructions stored in investment instructionarrangement database 22, investment broker system 20 allocates theremitted amounts to the appropriate investment product account 40 (step326).

With respect to the outstanding financial event amounts due from eachcardholder (step 330) in a typical billing cycle, billing system 10preferably creates a file of past due cardholders (step 331) andtransmits the file to a suitable collections system, such as, forexample, the American Express TPNS collections system, whichcommunicates with the cardholder to appropriately resolve the past dueaccounting issues. With respect to investment funds, investment system20 communicates with billing system 10 to stop the collection processbecause the investment funds are preferably not required payments.

More particularly, with reference to FIG. 5, after the cardholdersubmits payment to billing system 10 (step 502), billing system 10suitably processes the remittances (step 504) through payment hierarchysystem 19 which applies a payment hierarchy to the remitted funds todetermine the ordering for applying payments to the outstanding amountsowed to the financial events (step 508). The financial events are cardcharges at merchants which were previously incurred by the cardholdersand which were previously captured by billing system 10 and preferablystored in financial event database 14. If the remitted funds areinsufficient to satisfy the amount owed to merchants for the financialevents, billing system 10 suitably processes a file of past-duecardholders (step 510) wherein the file of past-due cardholders isforwarded to a collections system.

In a preferred embodiment of the present invention, investment brokersystem 20 includes its own investment payment hierarchy system 24. Thus,while payment hierarchy system 19 processes the remitted payment withrespect to the financial events located in financial event database 14,investment payment hierarchy system 24 processes the remitted paymentsto determine the allocation of funds to the preselected investmentproducts. For example, if the cardholder instructions include $50 toMutual Fund A and $25 to Annuity B each month, yet the cardholder onlysubmits an additional $20, investment payment hierarchy may apply $15 toMutual Fund A and $5 to Annuity B.

However, if the cardholder submitted insufficient funds to satisfy theintended allocation to the investment products, the collections systemof billing system 10 will not include the cardholder in the past-duecardholder file (as long as the remitted funds satisfy the amounts owedfor the financial events). In other words, because participation in theinvestment products is voluntary, if the cardholder does not submit asufficient amount of additional funds to satisfy the intended allocationto the investment products, the collections system does not submit thecardholder account to the collections system and the system does notcharge interest for the unpaid investment funds.

Moreover, the collections system preferably monitors the non-payment ofinvestment funds. Particularly, if the cardholder does not submit theselected investment funds for a predetermined number of days, preferably60 days, the collections system will remove the cardholder from cardaccount 12 of the billing system 10 and the billing statement will nolonger include a reminder to submit the investment funds. In a preferredembodiment, the collections system is the American Express TPNS system.

While payment hierarchies 19 and 24 suitably apply the appropriatebusiness rules to determine the hierarchy of payments to the specificfinancial events and investment products, respectively, one of ordinaryskill in the art will appreciate that payment hierarchy systems 19 and24 include any system suitably configured to determine the appropriateallocation of remitted funds to internal charges or products and/or tothird party charges or products. In an alternative embodiment, thepresent system may charge a fee to the cardholder for applying theremitted funds to third party investment products.

For the cardholder investment products in which sufficient remittancesare received, the billing system 10 creates a settlement file,preferably within the same day as the receipt of funds, which preferablyincludes the card account number, remittance amount and/or credit amount(step 512). The billing system 10 then transmits the settlement file toinvestment broker system 20 which, preferably on the next day, matchesthe card account number to the preselected investment products withininvestment instruction arrangement database 22 to verify that theinvestment products were preselected. The newly-created investmentproduct file is passed to the investment account database 40 to applythe remittances to the individual product accounts. The remittances arethen matched to the investment instruction arrangements withininvestment instruction arrangement database 22 by matching the cardnumber to the investment broker system 20 account identification andmatching the remittance amount to the percent allocation (step 518).Additionally, any credit amount which exists is preferably identifiedfor future reporting. The system then applies the remitted funds to theactive (selected) arrangements within investment instruction arrangementdatabase 22 (step 514).

An investment product file which includes a date, card number,remittance amount or credit amount for each record is preferably createdwithin the arrangements of investment instruction arrangement database22 (step 516). Investment broker system 20 then generates a cardauthorization remittance report (step 520) and the report iscross-checked for unmatched card numbers, remittances, credits anddebits (step 522). If any errors exist, investment broker system 20resolves any exceptions on the card (step 524) and provides anAuthorization Remittance Processing Exception Report.

Moreover, after investment broker system 20 receives the settlement filefrom billing system 10, investment broker system 20, if appropriate,generates an unapplied funds report and/or an error report (step 526) Ina preferred embodiment, the unapplied funds settlement report istransmitted to investment broker system 20 to suitably inform investmentbroker system 20 of the investment fund errors and allows investmentbroker system 20 to resolve the investment fund errors (step 528 and530). In a preferred embodiment, the settlement file is comprised of twofiles which each include a record for each remittance, wherein therecord preferably includes the card number, remittance amount andservice establishment number.

With momentary reference to FIG. 3B, after investment payment hierarchysystem 24 determines the appropriate allocation of the investment fundsto particular investment products, investment instruction arrangementdatabase 22 organizes the particular cardholder investment productpurchase request in an arrangement database. Based upon the arrangementdatabase within the investment instruction arrangement database 22, thesystem trades or applies cardholder investment funds to create ordersfor investment products, execute trades from the investment funds, andapply the purchase payments to the appropriate investment product (step326). After applying the contribution requests to the appropriateinvestment product, the investment products are funded with the moneyfrom the consumer remittance (step 328).

More particularly, with reference to FIG. 6, upon receipt of thesettlement file from billing system 10, investment broker system 20utilizes the cardholder information within the settlement file tosuitably obtain the particular investment instruction arrangements foreach cardholder from investment instruction arrangement database 22(step 602). Upon matching the cardholders with the investmentinstruction arrangements, investment broker system 20 suitably createstrade order files which preferably include a date, investment brokersystem 20 identification, ticker symbol, order amount and summary oftotal dollars (step 604). In a preferred embodiment, the trade orderfiles are reformatted to allow processing by a suitable trading system(step 606), wherein the trading system communicates with the presentinvention. The orders are further supplemented with the appropriatetrade information, such as, for example, an identification of theinvestment trade, a translation from the code account to a sweep fund,and an identification of the order as a qualified or non-qualified order(step 608). In an alternative embodiment, the no-load or othernon-proprietary orders (investment products not offered by theinvestment broker system 20) are provided with a routing code to allowthe order to be uploaded to another external system for furtherprocessing (step 610).

Preferably, after investment broker system 20 creates the trade orderfile, the system generates reports such as, for example, cardauthorization order transactions, IRA cash transactions, non-IRA cashtransactions, daily activity file counts, and/or the like (step 612).The reports are then suitably transmitted to billing system 10 whereinbilling system 10 allows the reports to be suitably available to billingsystem management (step 614). Alternatively, the reports may beavailable to the cardholder via regular mail, facsimile, Internet or anyother electronic means. The daily reports generated by the system alsoinclude a balance of the cardholder's investment funds (step 616). In apreferred embodiment, to create the orders, execute the orders andexecute the trades, investment broker system 20 includes any combinationof systems suitably configured to perform the aforementioned functionssuch as, for example, the American Express Phase 3 and SURPAS systemswhich use the Tandem code and the SPTG (Special Products TechnicalGroup) system for translating mainframe code to Tandem code.

With respect to the pricing of the investment products, investmentbroker system 20 or a third party investment product company suitablyestablishes an end-of-the-day price for the investment product (step620) and investment broker system 20 suitably obtains the investmentproduct price from the third party investment product company (step622). The price is obtained manually, but one skilled in the art willappreciate that the price may be obtained automatically via software,electronic transfer or other mode of transmission. Investment brokersystem 20 suitably matches the previously created trade order file withthe investment product price (step 624). The system then preferablyupdates the trade order file with the price of the client trade (step626) and appropriately updates the client account balance (step 628)within investment account database 40. Additionally, investment brokersystem 20 suitably generates a settlement report (step 630) and suitablytransmits the report to investment broker system 20 (step 632) which, inturn, writes the order (step 634) and suitably transmits the order tothe investment product company, preferably before the trading marketopens, to allow the investment product company to execute the trade(step 636).

One skilled in the art will appreciate that the transmission of thereports and orders is executed in any appropriate manner fortransferring the information including manual reporting, facsimile,electronic reporting or other suitable mode of transmission. Moreover,in an alternative embodiment, the aforementioned functions for providingreports, obtaining investment product information, or writing orders canbe accomplished by any third party business unit such as, for example, ainvestment broker system 20 house. In a preferred embodiment, dependingon securities regulations, trade information database 30 prices thevariable investment product, such as mutual funds, within 24 hours afterinvestment broker system 20 receives the cardholder funds. In apreferred embodiment, investment broker system 20 receives thesettlement file and processes the file into trade orders and credits thecard member account. The reconciliation report discussed above ispreferably faxed to the cardholder on the morning of day 3 (three daysfrom receiving the cardholder remittance). To conform with theappropriate securities regulations, all of the aforementionedtransmission steps may be subjected to specific time of day turnaroundrequirements.

One skilled in the art will appreciate that, after the remittanceprocess (step 215), the system may incorporate any number ofcapabilities and functionalities which suitably enhance efficiencies andcustomer service. For example, the system may confirm investment productorders and trades, reconcile account balances, provide clientstatements, incorporate tax reporting summaries and suggestions,generate refund checks, reconcile money transfer amounts, processinvestment product withdrawals, wire transfer money and/or redeem mutualfund shares. Additionally, the system may provide manual or automaticservices for managing client inquiries and requests and maintainingclient data. Furthermore, cardholders may make withdrawals and changesto their investment broker system 20 accounts or terminate participationin the service by calling a toll free number, submitting an Internetrequest or any other suitable communication means. If cardholders wantto change the amount they wish to invest, the cardholders can simplycommunicate with the investment broker system 20 through the normalinvestment process which may include, for example, calling a customerservice representative, faxing requests to the broker, entering changeselectronically through the Internet or any other suitable communicationmeans.

Furthermore, since each investment is voluntary, non-payment of theinvestment amount will not affect the cardholder's ability to charge onthe charge card and the unpaid investment amount will not accrueinterest or other charges. Moreover, the cardholders are not exposed toany risk of loss by using the charge card administrator as a processingagent for their intended investment amounts because, in a preferredembodiment, the investment broker system 20 takes full responsibilityfor the safety of the funds from the time the intended investment amountis received by the charge card administrator until the time ofinvestment. Thus, as discussed above, after receiving the billingstatement each month, the cardholder sends a single check for bothregular charge card purchases and for the purchase of the investmentproducts. However, since the payment contribution is voluntary, thecardholder can choose not to pay without an impact to their overdueaccount balance.

Particularly, the charge card administrator preferably does not hold orcontrol the remitted investment funds because the charge cardadministrator only handles the funds pursuant to the cardholders'direction to transfer the funds. The billing system deposits the fundsinto the investment account database 40 based on the cardholder'sinstructions in investment instruction arrangement database 22.Moreover, the charge card administrator will not forward any funds untilthe remitted investment funds are received by the charge cardadministrator. In other words, the cardholder does not charge theinvestments to his charge card account; rather, the cardmember remitsthe investment funds to the charge card administrator which in turnremits the investment funds to the investment broker system 20.Additionally, as discussed above, in order to avoid any “requirement” tosubmit investment product payments, the portion of the remitted amountto be applied to the investment product bypasses the regular charge cardauthorization process, and thus, if the investment product funds are notreceived, the system will not transmit the cardholder account to thecollections system.

Although the invention has been described herein in conjunction with theappended drawings, those skilled in the art will appreciate that thescope of the invention is not so limited. Modifications in theselection, design, and arrangement of the various components and stepsdiscussed herein may be made without departing from the scope of theinvention as set forth in the appended claims.

1. An administrative system for funding at least one investment productincluding: a charge card billing system capturing financial eventinformation wherein said billing system comprises: a card accountdatabase including user accounts; a billing information databaseincluding information about user billings and to provide periodicstatements related to previously established financial events; afinancial events database including information about said previouslyestablished financial events associated with a user; a remittancedatabase including information about user combined remittances of userfunds, wherein said combined remittances include a portion of said userfunds to satisfy debts charged to said user from said previouslyestablished financial events disclosed in said periodic statement and aportion of said user funds for at least one investment product asinvestment funds, wherein said investment funds were not previouslyinvested, and without said charge card billing system loaning saidinvestment funds to said user; a payment hierarchy system establishingrules for distributing said combined remittances to said previouslyestablished financial events and to an investment brokerage systemconfigured to facilitate said investment; and, an investment brokersystem in communication with said billing system wherein said investmentbroker system comprises: an investment instruction arrangement databaseincluding user investment instruction information; an investment accountdatabase including said at least one investment product; and, aninvestment payment hierarchy system establishing rules for distributingsaid user funds to said at least one investment product.
 2. Theadministrative system of claim 1, wherein said at least one investmentproduct includes at least one of a fixed annuity, variable annuity, CD,insurance, certificate, equity and mutual fund.
 3. The administrativesystem of claim 1, wherein said charge card billing system avoids acollections process upon remittance of sufficient said user funds forsaid financial events and insufficient investment funds.
 4. Theadministrative system of claim 1, wherein said at least one investmentproduct is pre-selected by said user.
 5. The administrative system ofclaim 1, wherein said billing system and said investment broker systemare accessed via at least one of a telecommunications linkage,facsimile, Internet and a point of interaction device.
 6. Theadministrative system of claim 1, wherein said financial events databaseincluding information about previously established financial eventsassociated with a user, further facilitates: receiving an account numberand purchase amount from said user to facilitate user purchase from amerchant; authorizing said account number and said purchase amount;providing an approval code to said merchant, wherein said approval codeis associated with said account number and said purchase amount;receiving a request from said merchant for payment of said purchaseamount, wherein said request includes said approval code; and, sendingsaid periodic statement to said user, wherein said periodic statementincludes said purchase amount.
 7. A method for funding at least oneinvestment product including the steps of: providing a charge cardbilling system through which a user charges financial events; capturing,using said billing system, previously established financial eventinformation; providing an investment broker system in communication withsaid billing system, wherein said investment broker system includesmultiple investment products through which said user can select at leastone investment product for purchase; billing said user via a periodicstatement for said previously established financial events related tosaid user; accepting, by said charge card billing system, a combinedremittance of user funds from said user, said accepting is in responseto said periodic statement; a portion of said combined remittancedefined as said user funds to satisfy debts charged to the user fromsaid previously established financial events disclosed in said periodicstatement, and said user funds to be applied to said at least oneinvestment product as investment funds, wherein said investment fundswere not previously invested, and without said charge card billingsystem loaning said investment funds to said user; applying hierarchyrules to said combined remittance of said user funds to determine aportion of said user funds to be allocated by said investment brokersystem to said at least one investment product; transferring saidinvestment funds to said investment broker system; applying paymenthierarchy rules to said investment funds; and, distributing saidinvestment funds to said at least one investment product in accordancewith said payment hierarchy rules.
 8. The method of claim 7, whereinsaid at least one investment product includes at least one of a fixedannuity, variable annuity, CD, insurance, certificate, equity and mutualfund.
 9. The method of claim 7, wherein said step of accepting acombined remittance avoids a collections process upon remittance ofinsufficient investment funds.
 10. The method of claim 7, wherein saidinvestment broker system allows said user to select said at least oneinvestment product for purchase prior to accepting a combinedremittance.
 11. The method of claim 7, wherein any of the steps arepreformed over at least one of a telecommunications linkage, facsimile,the Internet and a point of interaction device.
 12. The method of claim7, wherein billing said users via a periodic statement for previouslyestablished financial events includes: receiving an account number andpurchase amount from said user to facilitate user purchase merchant;authorizing said account number and said purchase amount; providing anapproval code to said merchant, wherein said approval code is associatedwith count number and said purchase amount; receiving a request fromsaid merchant for payment of said purchase amount, wherein said includessaid approval code; and, sending said periodic statement to said user,wherein said periodic statement includes said purchase amount.